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2022 (1) TMI 781 - AT - Income TaxRevision u/s 263 by CIT - AO framed assessment order on died company - DR vehemently pleads that the information to the effect that assessee company has died/ dissolved, was not submitted by the assessee either during the assessment stage or during the 263 revision proceedings, therefore, at this stage, the plea of the assessee should not be entertained and order passed by PCIT may be upheld - HELD THAT:- It is clear that name of assessee company was strike off from the record of the registrar of companies, with effect from 15.07.2008. The assessing officer framed original assessment order u/s 143(3) of the Act dated 30.12.2009, which is after the assessee company had dissolved/ name removed by ROC. AO has also framed the assessment order under section 143(3) r.w.s.254 of the Act, dated 31.03.2016, in pursuance of the direction given by the Tribunal. All statutory notices were issued by the Department after the company has dissolved. Notice issued on a dissolved/died company is not valid in the eye of law, as discussed above - in the absence of a valid notice, the AO has no authority to assume the jurisdiction to assess the tax liability, therefore continuation of the proceeding under the Income Tax Act, pursuant to such invalid notice, in the name of dissolved (dead) company, is without authority of law. Therefore, impugned notice as well as the proceedings taken pursuant thereto, therefore, cannot be sustained. Therefore, we quash the consequential order passed by the ld PCIT under section 263. Revision u/s 263 - Ad hoc disallowance of 10% of the land development expenses - HELD THAT:- Hon’ble Supreme Court in the case of Alagendran Finance Ltd. [2007 (7) TMI 304 - SUPREME COURT ] held that in respect of an issue which was not subject-matter of reassessment, the limitation under section 263(2) would run from the date of original assessment and revisional proceedings initiated in respect of such issue beyond the period of two years from the date of original assessment were barred by limitation. However, in assessee’s case the issue of land development expenses is there in the order framed by Assessing Officer u/s 143(3) r.w.s. 254 of the Act; which is subject to revision proceedings u/s 263 of the Act. Therefore, doctrine of merger would apply in a case of this nature. Hence, we reject the plea taken by Ld Counsel of the assessee. On merits, we note that while framing the assessment order u/s 143 (3) r.w.s 254 of the Act, dated 31.03.2016, the assessing officer made adequate enquiry. The assessee appeared before the assessing officer and submitted letter dated 19.01.2016 and sought adjournment. Thereafter, assessing officer, based on the material available on record adjudicated the issue by making ad-hoc disallowance @ 10% of land development expenses of ₹ 3,30,89,500/- which comes to ₹ 33,08,950/-. AO has applied his mind and made the disallowance @ 10% of land development expenses, hence, order passed by the assessing officer should not be erroneous. Therefore, in the assessee`s case under consideration, it is the appraisal of the same records which are already with the A.O. and the Ld. Pr. C.I.T. took a different view than adopted by the A.O. on the same set of facts, which is not permissible u/s 263 of the Act. In the above circumstances, the view taken by the A.O. was one of the possible views and the assessment order passed by him could not be held to be erroneous and prejudicial to the interests of revenue. There is difference between ‘Lack of enquiry’ and ‘inadequate enquiry’. It was settled by Hon`ble Supreme Court in the case of Malabar Industrial Co. Ltd [2000 (2) TMI 10 - SUPREME COURT] wherein it was held that if the A.O. adopts one of the possible courses available in the scheme of the I.T. Act which results in any loss of revenue or when two views are possible and the A.O. adopts one of them with which the C.I.T. does not agree, then it would not be an order prejudicial to the interest of revenue for invoking the jurisdiction u/s. 263. Certainly it is not a case wherein adequate enquiries at the assessment stage were not carried out or assessment was made in haste. However, what is an opinion formed as a result of these enquiries and verification of the materials is something which is in exclusive domain of the Assessing Officer, and even if Ld. Pr. Commissioner does not agree with the results of such enquiries, the resultant order cannot be subjected to revision proceedings. It is a settled position in law that provisions of section 263 of the Act do not permit substituting one opinion by another opinion. Therefore, the order of the Ld. Pr. C.I.T. cannot be sustained on the principle of ‘erroneous’ nature of the order of the A.O., as it is not erroneous. Based on the above discussion on assessee`s facts as well as on various precedents applicable to assessee’s facts, we are of the view that revisionary jurisdiction exercised by the Ld. Pr. C.I.T. u/s. 263 of the Act was not in tune with the facts and evidences on record duly explained to the Ld. A.O. and verified by him and that being so the order passed u/s. 263 of the Act on such erroneous stand is liable to be quashed. Therefore, we quash the order of the ld. PCIT u/s 263 - Decided in favour of assessee.
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